Use the information below to answer the following questions.
Sales in December were $960,000. Projected sales for the first quarter of 2015 are:
January $1,080,000
February $1,200,000
March $1,280,000
Sales are 20% cash and 80% on credit. Debtors pay in the month following the sale.
-Refer to the table above. Calculate the cash collected from debtors for the month of February.

Question

Use the information below to answer the following questions.
Sales in December were $960,000. Projected sales for the first quarter of 2015 are: 
January $1,080,000
February $1,200,000
March $1,280,000
Sales are 20% cash and 80% on credit. Debtors pay in the month following the sale.
-Refer to the table above. Calculate the cash collected from debtors for the month of February.

Quizplus · Accepted Answer

In February, projected sales are $1,200,000, of which 80% is on credit, which is $960,000. Since debtors pay in the month following the sale, the cash collected from debtors for the month of February is the cash collected in March, which is 20% of February's credit sales. Thus, the cash collected from debtors for the month of February is 20% of $960,000, which is $864,000.

Use the Information Below to Answer the Following Questions